[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE DELPHI PENSION BAILOUT: UNEQUAL TREATMENT OF RETIREES
=======================================================================
FIELD HEARING
before the
SUBCOMMITTEE ON GOVERNMENT OPERATIONS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JUNE 10, 2013
__________
Serial No. 113-34
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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U.S. GOVERNMENT PRINTING OFFICE
81-743 PDF WASHINGTON : 2013
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas MARK POCAN, Wisconsin
DOC HASTINGS, Washington TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky PETER WELCH, Vermont
DOUG COLLINS, Georgia TONY CARDENAS, California
MARK MEADOWS, North Carolina STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Government Operations
JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan GERALD E. CONNOLLY, Virginia
MICHAEL R. TURNER, Ohio Ranking Minority Member
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina
C O N T E N T S
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Page
Hearing held on June 10, 2013.................................... 1
WITNESSES
Mr. Bruce Gump, Delphi Salaried Retirees Association
Oral Statement............................................... 6
Written Statement............................................ 9
Ms. Mary Miller, Delphi Salaried Retirees Association
Oral Statement............................................... 14
Written Statement............................................ 16
Mr. Tom Rose, Delphi Salaried Retirees Association
Oral Statement............................................... 18
Written Statement............................................ 20
Mr. Paul Dobosz, Delphi Salaried Retirees Association
Oral Statement............................................... 32
Written Statement............................................ 34
Mr. James Sherk, Senior Policy Analyst in Labor Economics, The
Heritage Foundation
Oral Statement............................................... 36
Written Statement............................................ 38
APPENDIX
The Hon. Tim Ryan, a Member of Congress from the State of Ohio,
Opening Statement.............................................. 62
The Hon. Susan W. Brooks, a Member of Congress from the State of
Indiana, Opening Statement..................................... 64
Draft PBGC Settlement Agreement from Karen Morris................ 65
Delphi/PBGC Settlement from John Menke........................... 68
Stipulation from Ms. Karen Morris................................ 70
PBGC Edits to Delphi and GM Press Releases....................... 73
THE DELPHI PENSION BAILOUT: UNEQUAL TREATMENT OF RETIREES
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Monday, June 10, 2013
House of Representatives
Subcommittee on Government Operations
Committee on Oversight and Government Reform
Washington, D.C.
The subcommittee met, pursuant to call, at 10:00 a.m., in
Room 150, Sinclair Community College, 444 W. 3rd Street,
Dayton, Ohio, Hon. John L. Mica [chairman of the subcommittee]
presiding.
Present: Representatives Mica and Turner.
Staff present: John Cuaderes, Deputy Staff Director; Linda
Good, Chief Clerk; and Tyler Grimm, Professional Staff Member.
Mr. Mica. Good morning. I would like to call this hearing
of the Committee on Oversight and Government Reform and the
Subcommittee on Government Operations to order. We are
conducting this morning a field hearing of our subcommittee.
The hearing title today is ``The Delphi Pension Bailout:
Unequal Treatment of Retirees.''
I am pleased to be in Dayton today, and we are here at the
request of Congressman Turner.
The order of business will be as follows. I will start with
some opening statements, myself, Mr. Turner, and we will leave
the record open for other members who want their statements to
be made part of the record.
Today we will hear after the opening statements from two
panels of witnesses, and we will have each of them give their
testimony, and then we will allow for questions after we have
completed the members of the panels with their testimony.
So, first of all, I want to thank Mr. Turner for his
untiring support on behalf of the Delphi pensioners who were
treated unfairly and again calling this matter to my attention.
I took over the chairmanship of the Government Operations
Subcommittee. I am the senior member of the panel. Some of you
may have seen lately some of the work Mr. Turner, myself, Mr.
Issa are involved in, a number of high-profile matters before
the Congress. And we are the chief investigative panel in
Congress, so it is our responsibility, whether they are big
issues or issues like the Delphi pension issue that affects
thousands of retirees, they all deserve our attention, and that
is the purpose of this hearing today.
I will say also that I want to thank Sinclair Community
College for hosting this. I just met President Johnson. I have
a remote attachment to the community college. I found out that
Sinclair has an association with two Florida community
colleges, one Santa Fe and Gainesville, and then my alma mater,
the Miami-Dade Community College, which I graduated from. I am
very proud of the work of community colleges and the
opportunity they give so many people like myself and others.
So again, we are pleased to be here, and we will proceed.
We will start with my opening statement.
I have sort of a general comment that I usually give at
these hearings to explain the purpose of government oversight,
Government Reform panel, explaining to folks that we exist for
two fundamental purposes.
First, Americans have a right to know that money Washington
takes from them is well and justly expended; and second, that
Americans deserve an efficient and effective government that
works for them. Our duty and responsibility on the Oversight
and Government Reform Committee is to protect these rights. Our
solemn responsibility is to hold government accountable to
taxpayers because taxpayers have a right to know exactly what
they got from their government and where their government must
be held responsible.
We must work tirelessly and in a bipartisan fashion, and
also with a partnership with citizen watchdog groups, to
deliver the facts to the American people and bring reform and
justice and fairness to the American people and hold the
Federal bureaucracy accountable.
So that is the mission of our committee in general. As to
this specific hearing today, again, this is a continuation of
the committee's efforts to learn how and why salaried Delphi
retirees saw their pensions cut as a result of decisions made
by the Treasury Department and the Pension Benefit Guaranty
Corporation.
Again, we would not be here without the untiring commitment
and dedication of your congressman, who has been sort of like a
pit bull on this and has not let it go and, again, brought this
to my attention. I got through reading some of these volumes
and others of background and immediately said to him that a
great injustice is done to the people that he represents. So I
know we will not stop until we pursue the truth, get the facts.
Some of that has not been uncovered today, and that is the
purpose of this hearing, and we are not going to stop until
Delphi retirees get the justice they deserve.
The facts and circumstances about why we are here bear
repeating. Delphi, and let me say this again for the record,
separated, as we know, from GM and became an independent
company in 1999. At that point in time, a separation agreement
allowed for unionized Delphi employees to secure a guarantee
from GM that in the event of a Delphi bankruptcy, GM would top-
up--that is, make whole--the remainder of pensions not covered
by the Pension Guaranty Fund.
In fact, no such agreement was made for the salaried
employees. As such, when the Delphi plans were terminated in
2009, the salaried retirees faced immense hardship and lost
health coverage and other benefits, dramatically disrupting
their lives and their plans for retirement, while unionized
employees maintained full pensions and benefits. Today we will
hear from some of those so affected.
In addition to the financial hardship, non-unionized Delphi
retirees feel betrayed by their government. This is a
government program. This is government money, taxpayer money,
and it picked winners and losers, and did so in an unjust
fashion. While the unions were heavily involved in the
negotiations surrounding the bankruptcies in GM and Delphi, the
salaried employees did not have a seat at the table and, in
fact, were left in the dark because of the fact that the
Administration did not deem them a politically favored class.
The whole mess could have been avoided were GM to pursue a
traditional bankruptcy route and not be subject to the
political whims of the Obama Administration. The traditional
bankruptcy route would have been better for GM in the long run
and would have mitigated the risk of a politicized decision-
making process such as what actually occurred with the Delphi
salaried retiree pensions.
The bankruptcy proceedings that occurred were simply a
legal vehicle for delivering ownership shares to the auto
companies to the government. In other words, in the words of
one legal scholar, instead of a traditional bankruptcy, that
quote was the Obama Administration, working with the
automakers, patched together a process without precedent, a
bankruptcy combined with a bailout, incorporating the worst
elements of both.
Issues surrounding why the pension fund for Delphi salaried
retirees was terminated are extraordinarily complex. At the
request of members of Congress, the Special Inspector General
for the Troubled Asset Relief Program, we are conducting an
audit of this issue. This report is said to be released in the
near future and should provide more insight into decisions made
by the Treasury Department and the Pension Guaranty Fund
relating to Delphi.
So with those comments, let me say that again I strongly
believe, after reviewing the record, information that is
provided to me, that a great unfairness exists, that the
government did, in fact, pick winners and losers unfairly, that
in this government bailout they used government money. They
also used government entities in making those decisions, and I
believe that they did so in an improper fashion.
One of the things that I don't know is what took place in
some of those proceedings. I talked to Mr. Turner last night
and I intend, if necessary, we will subpoena those records and
we will get the facts of who made what decisions, on what
basis, and what transpired. And again, I think, based on what I
have seen, the unfairness was very calculated and that we
should find some way to make these retirees whole.
In addition to issuing subpoenas, as I said, if necessary,
to get those documents that have been requested and that have
not been provided to the committee or to Congress prior to my
becoming the chair of the subcommittee.
The second thing we will do is we will hold as many
hearings as necessary. This one is here, and we will also hold
them in Washington until we do get the facts, and I think we
also need to carefully review the findings of the Inspector
General's audit report that is coming out.
So, with those comments, and with that agenda in mind to
proceed on this issue, I am now pleased to yield to the
gentleman from Ohio, Mr. Turner.
Mr. Turner. Thank you. Thank you, Mr. Chairman. I have
several people, obviously, to thank. First I would like to
thank Sinclair Community College for hosting us; and secondly,
I would like to thank the Delphi salaried retirees themselves.
Mr. Chairman, as you know from all of the materials that
you have reviewed in preparation for this hearing, were it not
for the Delphi salaried retirees standing up against the
injustice which they faced, organizing themselves in a great
structure and filing suit, pursuing the judicial process
through this and working as a partner with us, we would not
know the details that we know today of what occurred in the
process of the Administration picking winners and losers and
resulting in the Delphi salaried retirees losing a great
portion of their retirement benefits.
Mr. Chairman, as you and I discussed last night, it was my
intention after hosting this hearing to approach you to ask for
further follow-on hearings in Washington after this hearing and
for support, if need be, for issuing subpoenas, since the
Administration has not been forthcoming.
I want you all to know in attendance that as a result of
your great work and the record that the chairman was able to
review, we did not have to wait until this hearing was over.
The chairman, when I had dinner with him last night, had
reviewed the materials and he said, well, I looked at this and
it looks like we need some follow-on hearings in Washington,
D.C., and if need be, we should issue subpoenas.
So if you would all join me in thanking the chairman both
for being here ----
[Applause.]
Mr. Turner. Mr. Chairman, that doesn't mean we don't need
to have this hearing, but it does mean we greatly appreciate
the fact that you are dedicated to this issue, the work that
you have done and the preparation for today, and your
commitment to addressing the issue of injustice.
Mr. Chairman, before we proceed, I have several statements
for the record from other members of Congress that could not be
here with us today, and I ask for unanimous consent for those
to be entered into the record.
Mr. Mica. Without objection, so ordered.
Mr. Turner. I would also like to point out that we have
here with us today staff from the offices of Congresswoman
Susan Brooks and Senator Rob Portman, both of which have been
excellent partners on this issue.
And as members of the Government Reform and Oversight
Committee, as the chairman says, we are dedicated to the issue
of trying to do investigations to right injustices. As you
know, our committee is very active on the issues of Benghazi,
the IRS, and other issues that appear to be scandals where the
Administration has overstepped what our concept is for justice
and protection of our own liberties. This injustice, what has
occurred with the Delphi salaried retirees, is one that needs
to be remedied.
Mr. Chairman, the Dayton region was the birthplace of the
Delphi Corporation. The company was founded as the Dayton
Engineering Laboratories Company, which evolved through the
hard work of Ohioans into Delco, which was a division of
General Motors. General Motors subsequently spun off Delphi
Corporation, which at one point was the largest parts supplier
to General Motors. My father worked for General Motors for over
40 years in this town.
When Delphi declared bankruptcy in 2005, the company
decided to close or sell several facilities in Ohio. Here in my
district, two facilities in Dayton, as well as facilities in
Kettering, Moraine and Vandalia, were closed. The effect of
these plant closures have been felt throughout the Dayton
region as many of our family members, neighbors, and friends
were Delphi employees. Whole neighborhoods have been affected
by Delphi's bankruptcy, and it is appropriate that we are right
here in Dayton to hear directly from the retirees here in this
community.
In the wake of the General Motors bailout, the
Administration picked winners and losers. There is no other way
to say it. Without transparency, without justification, and in
my opinion without respect for the men and women who dedicated
years of service in earning their retirement benefits, the
treatment of salaried retirees is particularly troubling in
comparison to the benefits received by some in organized labor
organizations. In fact, the UAW and the Ohio AFL-CIO have
written letters in support of restoring benefits for the Delphi
salaried retirees. They see also the injustice that was done
here.
I have worked alongside many members of my community and
members of Congress to advocate on behalf of both the union and
non-union labor to ensure that all retirees receive whatever
benefits they were promised. All of the retirees, regardless of
labor affiliation or not, worked alongside each other during
their careers and, Mr. Chairman, there were also other unions
that did not receive the full benefits and that were penalized
in this process. They should not be treated any differently in
their retirement.
Mr. Chairman, your assistance in bringing to light what
occurred, what transpired in the Administration picking winners
and losers is what will assist us in being able to set aside
this injustice. No administration should be able to take
taxpayer dollars and pick winners and losers and also at the
same time refuse to tell the country what they did with the
money, what their justification and rationale was, and they
should also not be free from our oversight and review and
certainly from the legal processes.
To this date, the Administration has continued to try to
thwart the lawsuit that has been filed by the Delphi salaried
retirees, resisting requests for production of documents and
discovery requests, and they have also resisted congressional
oversight as we have requested documents.
It should not take years for us to find out basically two
questions, what happened and why, so that we can, then, both
through a legal basis and through a congressional basis, review
the decisions that were made and the effects on the people that
are here.
Mr. Chairman, thank you for being here, for this hearing,
and thank you for your commitment to what truly is a great
injustice. Thank you.
[Applause.]
Mr. Mica. Well, thank you. Thank you again, Mr. Turner.
We will now turn to our first panel. We have two panels of
witnesses.
First, Mr. Turner asked that members may have seven days to
submit opening statements for the record. Without objection, so
ordered.
And now, as I welcome the witnesses, let me introduce them
publicly. First, Mr. Bruce Gump is a member of the Delphi
Salaried Retirees Association. Ms. Mary Miller is a member of
the Delphi Salaried Retirees Association. Mr. Tom Rose is also
a member of the Delphi Salaried Retirees Association.
As you have heard previously, this is an investigative
panel of Congress, chief investigative panel, so we do,
pursuant to our committee rules, swear in all of our witnesses.
So if you will please stand, rise, raise your right hand.
[Witnesses sworn.]
Mr. Mica. Let the record reflect that all three witnesses
answered in the affirmative.
And we will start with Mr. Gump. I recognize you.
Let me just tell all of the witnesses, we would like you to
try to limit your remarks before the subcommittee to five
minutes. If you have additional data, information, or something
you would like included in the record, if you would request
that submission through the chair, we will include it in the
official testimony and transcript of today's hearing.
So, Mr. Gump, welcome, and you are recognized.
WITNESS STATEMENTS
STATEMENT OF BRUCE GUMP
Mr. Gump. Thank you very much, Chairman Mica and
Congressman Turner, and thank you for this opportunity.
As you said, my name is Bruce Gump, and I worked for
General Motors for more than 22 years, and then Delphi for 10
years as a senior engineer. I worked hard and I played by the
rules. Like many others who made General Motors and Delphi able
to exist by working in thousands of salaried positions, we
didn't expect to be treated like yesterday's garbage by our
government.
I would like to tell you what really happened because of
the intervention of our government. When the President's Auto
Task Force was formed, it quickly decided that in order for
General Motors to be successful, it needed to secure General
Motors supply of critical parts from bankrupt Delphi. So they
looked at the roadblocks and worked quickly to eliminate them.
Up to that point, everyone involved knew that there would be no
way to resolve the Delphi situation without addressing the
Pension Benefit Guarantee Corporation's liens and claims that
had been placed on Delphi's assets. These liens and claims were
worth billions, and they ensured that Delphi and GM could not
walk away from their long-standing pension obligations.
But then the Auto Task Force was formed and took over the
job of facilitating a resolution to the pension issues. They
killed any hope we had of the PBGC looking out for our
interests. The Auto Task Force has testified that the Treasury
was ``trying to facilitate an agreement where the salaried plan
would get terminated and taken over by the PBGC.'' And not
surprisingly, that is exactly what happened. The shame of it is
that the termination was entirely unnecessary. The plan was
well funded, and there were alternate sponsors available.
Just a few weeks prior to the termination of the salaried
pension plan, the plan's actuary completed and AFTAP analysis
that determined the plan was about 86 percent funded, better
than average at that time. The bottom line is that our plan and
the liens and claims that protected it were simply in the way
of the President's Auto Task Force. They were in a hurry, so
they found a way to just kill the plan as quickly and
efficiently as possible.
While there is ample evidence in the form of emails and
testimony to show how deeply responsible a select few in
Treasury were for our situation, one need look no further than
Vice President Biden's own words. In an interview with a
Youngstown, Ohio television reporter on the subject he said,
``We were able to protect the hourly workers. Some salaried
workers got hurt, particularly the younger ones.'' The ``we''
in that sentence refers to the Administration, of which he is a
member, and confirms that the Auto Task Force under the U.S.
Treasury was deeply involved in the decision to protect the
hourly workers but not the salaried workers.
Also, the PBGC and Treasury have worked tirelessly to keep
the records of their actions secret. If they were really proud
and nothing inappropriate was done, they wouldn't have to work
so hard to keep secrets.
There have been numerous roadblocks thrown up to stop our
attempts to gain understanding and justice. PBGC's so-called
administrative record was found to be incomplete, to say it
kindly. PBGC refused to comply with discovery for nearly two
years, and finally did after the federal court issued five
additional orders. PBGC was ordered to fully comply with our
discovery demands within 90 days, but they took all 90 to
supply the very first documents, and then continued only in
dribs and drabs. Thirty thousand documents are still missing.
PBGC offered misleading testimony while under oath about
providing the administrative record. Seventy thousand documents
not included in the original record have now been obtained, and
the PBGC simply has no credibility.
PBGC has refused to supply non-personally identifiable
Census information, as required in discovery. Congressional
attempts to gain access to documents have been met with a
shameful disregard and a threat to claim executive privilege
over a pension issue. That is, to me, a tacit admission of
guilt.
Treasury tried to stymie the SIGTARP investigation and, in
fact, it took a special hearing to gain access to the
principals in the President's Auto Task Force. The
Administration and the PBGC have misrepresented their actions
and misled this committee for nearly four years now. It is time
to bring this to an end and do what should have been done to
begin with and restore the full pensions that we earned over
decades of service.
Finally, there is the economic impact of the decisions that
left the salaried retirees without their full pensions and no
health care insurance. According to an extended Youngstown
State University study, the cost to Ohio in terms of economic
activity was nearly half a billion dollars per year, and nearly
15,000 additional jobs were lost. Much of that can be recovered
by restoring the pensions of the retirees.
In summary, what really happened is very different from
what the PBGC and Treasury have said. We are still trying to
learn more, and we won't ever give up. But all we really want
is what we earned. Justice was provided to our co-workers. Real
people are suffering because of this illegal and unethical
treatment by our government. At the end of the day, the
decisions to terminate our plan were made, vetted, encouraged
and determined by the President's Auto Task Force. They played
God, and they played with people's lives, and they purposely
hurt tens of thousands of American citizens in the process.
Please help us force transparency into this issue by
pursuing the records from Treasury and PBGC. Hold them
accountable for their actions, good or bad. Show that American
citizens deserve to be treated equally regardless of who they
associate with or what groups or clubs they belong to. Help the
Administration to live up to its promises of transparency and
pension protection, and help us gain the pensions we earned,
and help the economy to recover more quickly. Thank you.
[Prepared statement of Mr. Gump follows:]
[GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]
Mr. Mica. Thank you for your testimony, and now we will
turn and recognize Mary Miller.
Welcome, and you are recognized.
STATEMENT OF MARY MILLER
Ms. Miller. Thank you, Congressman, for inviting me to
testify today. My name is Mary Miller. In 1999, General Motors
decided to spin off their component parts business. This
spinoff became Delphi Corporation. Delphi Corporation, the
largest automotive parts supplier in the world, was integral to
GMs success. Most Delphi retirees worked two-thirds or more of
their careers in service to GM, and only a small part of their
careers for Delphi. I worked 22 years for General Motors and
only nine for Delphi. I was forced to retire in 2008 when
Delphi decided to permanently close its brake operations, where
I worked as an HR manager.
All GMs salaried retirees are receiving their full
pensions. All GM hourly retirees are receiving their full
pensions. And all Delphi hourly retirees of major unions are
receiving their full pensions. So what brings us together this
morning if all of these retirees are receiving their full
pensions? We are here today because one key group who worked
side by side with all these other people is not receiving their
full pensions.
The Delphi salaried retirees' pensions were decimated in
2009 during the Auto Task Force rush to settle GMs bankruptcy.
The Delphi salaried retirees lost up to 70 percent, that is 70
percent, of our hard-earned pensions. This loss has been
devastating for the salaried retirees and their families.
Congressmen, this has caused home foreclosures, bankruptcies,
family breakups, suicides, serious stress-related illnesses,
and an ongoing struggle just to pay routine bills.
How can it be legal for the government to pick winners and
losers amongst its own citizens? For me and many of my fellow
retirees, the burden of trying to figure out how to make ends
meet gets heavier every day. We are real people. We suffer real
hardships. And all the while, many of our neighbors with whom
we worked side by side are receiving their full pensions.
The Delphi hourly retirees of major unions are receiving
every pension dollar they earned. The American taxpayers are
paying for top-ups for all of the Delphi hourly retirees of
major unions, top-ups that were won during the GM bankruptcy by
politically connected individuals.
The PBGC was created to help save retirement plans, and
really, that is what I believe it tries to do. Just look at its
efforts in the recent cases of American Airlines and Tower
Automotive. What was different in our case? What was unique
about our salaried pensions that allowed the PBGC to do nothing
to defend and protect our pensions, pensions that were well
funded and very savable?
We have heard over and over how proud the Administration is
of the Auto Task Force's efforts to save automotive jobs in
America. We have heard time after time how everything the Auto
Task Force, the Treasury, and the PBGC did to help preserve
those jobs was done normally and within the law. So, if they
are so proud of everything they have done, then why are they so
secretive about giving us the records we have been asking for
since 2010?
They have thwarted us at every turn, denying our request
for documents, not complying with our subpoena for their
records, and even going to a different court to quash the
subpoena. It really makes you eager to know what they are so
desperate to hide that a White House attorney indicated they
would use executive privilege to keep from revealing their
records, if subpoenaed.
Congressmen, this is from the same administration that
promised, ``Transparency and the rule of law will be the
touchstones of his presidency.''
The PBGC has stonewalled every request we have made. The
Treasury has been downright non-participative regarding every
record we have asked them to provide. The House Ways and Means
Committee asked for Treasury records last fall; none have been
provided to date. We are asking the House Oversight and
Government Reform Committee to obtain the Treasury's records so
the truth about our case can finally be uncovered.
While we will never give up our fight, we do need your help
to win. We need our congressional representatives to be our
advocates, to be on our side, to use your power, given to make
our government truly one of checks and balances, to demand this
blatant wrong be righted immediately--not later this year, not
next year, not sometime in the future, but now. This fight has
been going on for almost four years. It is time to end this
disparate treatment and settle this shameful wrong while most
of our retirees are still alive. Some are not.
This can be done today with no cost to the taxpayers. The
funds the PBGC received for our salaried pensions are more than
enough to make our pensions whole. Please join us in our brave
fight to win back what is rightfully ours. Don't let any more
time slip by without pressing our case forward to resolve this
shameful, shameful violation of ERISA law. Help us move from
being victims to victors. Reassure us and millions of others
that this is still America, the land of the free and the home
of the brave. We need your help. Thank you.
[Prepared statement of Ms. Miller follows:]
[GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]
Mr. Mica. Thank you.
We will turn now to Mr. Tom Rose.
Mr. Rose, you are recognized.
STATEMENT OF TOM ROSE
Mr. Rose. Thank you, Chairman Mica and Congressman Turner,
for holding this important hearing. Delphi salaried retirees
continue to seek the truth about our pension termination, a
termination that was absolutely unnecessary and, we believe,
illegal.
Yes, we believe the PBGC broke the law.
My name is Tom Rose. After college and two years of
military service, including a year in Vietnam, my automotive
career began with GM and continued for 30 years. I spent an
additional nine years with Delphi. I certainly felt that I
contributed a small piece to the powerful GM that had to be
bailed out in 2009. I also expected to receive my health care
and pension that was earned and promised as part of my
employment.
After the dust of the frantic 44-day GM bankruptcy had
settled, I found myself with zero healthcare and, in my case, a
40 percent pension reduction. My carefully planned retirement
was blown apart at a point in my life when recovery time and
opportunities are limited. I look back and wonder what I did
wrong.
I now realize that I first trusted GM/Delphi, and then I
trusted the Auto Task Force that guided the bailout under the
direction of Treasury. In the end, this trust was misplaced as
myself and 20,000 other Delphi salaried retirees were
abandoned.
We are glad that the union retirees have their full
healthcare and pensions; they earned it, they deserve it, but
so do we. They received their full pensions, not from obsolete
union contracts, as alleged, but were topped up per direction
of the Auto Task Force. As Mr. Gump stated, from Vice President
Biden, ``We were able to protect the hourly workers. Some
salaried workers got hurt, particularly the younger ones.''
Speaking for myself, I simply failed to understand how two
groups of employees working for the same company, in the
identical situation, could be treated so distinctly different
by our own government. The preferential treatment given the
union is blatantly obvious. Were salaried workers wrong to
expect fair and equitable treatment from our own government?
Matthew Feldman, a member of the Auto Task Force, stated
that, ``We were trying to facilitate an agreement where the
salaried pension plan would get terminated and taken over by
the PBGC and GM would assume liability for the hourly plans.''
They were certainly successful in terminating our pension in
spite of the fact that our plan was considered to be fully
funded by third-party actuaries. They were also successful in
having the taxpayers pick up the tab to fully fund hourly
pensions. This reinforces my belief that Treasury and the Auto
Task Force were calling the shots, and the PBGC was simply a
pawn in our pension termination.
The PBGC's role is to, quote, ``protect the retirement
income of pension plan beneficiaries.'' Let me recap how they
have protected us.
The PBGC's administrative record, which should clarify what
happened, only serves to interject confusion. Despite the PBGC
acknowledging almost daily coordination with the Auto Task
Force, the administrative record was almost entirely stripped
of references to this coordination.
FOIA, Freedom of Information Act, requests to obtain
information were answered by providing hundreds of pages of
redacted material or simply withholding information. Again,
this obscured the details of PBGC's actions.
DSRA's lawsuit was brought in September 2009, and after
numerous objections, Judge Tarnow of the U.S. District Court
for the Eastern District of Michigan ordered discovery in 2010.
The PBGC did not produce a single document until June 2012, and
only then after the court issued another five orders explicitly
stating our right to discovery. The last of these orders was
issued in March 2012, with a requirement to be completed within
90 days. After 15 months, the PBGC has still not fully
complied.
Treasury has never participated in discovery. Why not?
Isn't the current administration the alleged most open and
transparent ever? I don't mean to be critical. After all, the
DSRA consists of both Republicans and Democrats. But the huge
disconnect between words and actions is shameful.
As you know, the PBGC has also stonewalled numerous
congressional requests for information.
Recently, the PBGC announced that final benefit
determination for our pensions could not occur until 2015, thus
forcing continued financial uncertainty on salaried retirees.
So I ask, is this how the PBGC protects us? I could go on
but, in summary, justice delayed is justice denied.
Fortunately, there is some good news. A solution exists for
the salaried pension plan. In recent meetings with Treasury and
PBGC, a proposal has been presented that fully funds the
salaried pension plan, both retroactively and going forward.
This proposal can be implemented immediately and with zero
taxpayer money required. This would also fulfill the political
solution as suggested by Judge Tarnow.
Congressmen, today we are asking for your help in requiring
Treasury and PBGC to end this harm that was needlessly
inflicted upon this group of American citizens. After almost
four years, one Senate hearing, six House hearings, continuous
PBGC delays and no Treasury participation, this has gone on
long enough. A solution exists, and the time to implement this
is now. Thank you.
[Prepared statement of Mr. Rose follows:]
[GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]
Mr. Mica. Well, I want to thank all three of our witnesses,
and I will start with some questions.
First, tell me the Delphi Salaried Retirees Association,
Mr. Gump, Mr. Rose, Ms. Miller, what is its genesis, and how
long has it been in existence?
Mr. Gump. The DSRA was formed at the time when Delphi was
being pushed into bankruptcy. In the course of just two weeks,
we went from being totally nonexistent to being fully formed,
incorporated as a nonprofit, represented in court, with over
2,000 members.
Mr. Mica. Did you represent the salaried retirees in any of
the discussions before TARP, the Auto Task Force, the Pension
Guaranty Fund?
Mr. Gump. No. The only representation that we had was in
the bankruptcy court, and that was really only over the health
care issue.
Mr. Mica. Okay.
Mr. Gump. I should say that we were actually denied the
opportunity to be represented during all the pension issues.
Those meetings were held behind closed doors.
Mr. Mica. So no one represented your particular group, the
salaried retirees, in these discussions? No formal group
represented?
Mr. Gump. That is correct.
Mr. Mica. Were there any public hearings? I don't know.
Mr. Gump. No.
Mr. Mica. Everything was done behind closed doors?
Mr. Gump. As far as the decisions to terminate the
pensions, yes. All of that was made behind closed doors.
Mr. Mica. Okay. Mr. Rose, you just mentioned a solution,
and I think, Ms. Miller, you spoke about it. Ms. Miller, you
said that there was enough funds that had been paid into the
Pension Guaranty Fund to adequately compensate the affected
salaried employees whose pensions were denied. How did you come
up with that?
Ms. Miller. That is correct. Our attorneys were in the
meeting with the Treasury and the PBGC recently and submitted a
proposal ----
Mr. Mica. That is what Mr. Rose and you were talking about?
Ms. Miller. Yes, that is what he was talking about. The
proposal identifies ----
Mr. Mica. So you could isolate the funds. Of course, you
have the names and records. NSA probably has their phone
numbers, too.
[Laughter.]
Ms. Miller. Yes, it was factually backed up. It wasn't just
like a desire.
Mr. Mica. Right. So you have approximately 20,000 salaried
employees that were affected. Do you know the exact number or
approximate?
Mr. Rose. I believe it is about 20,300.
Mr. Mica. Oh, 20,300?
Mr. Rose. Yes.
Mr. Mica. It was interesting in reading some of the
documentation, most of them had worked for GM before and had
pretty long histories of working with GM before working with
Delphi. I am sure that is also documentable, Ms. Miller.
Ms. Miller. Right. I mean, Delphi wasn't in existence until
1999. So anyone who would be eligible to retire had to have had
a long career with GM before we were spun off into Delphi.
Mr. Mica. Actually, they got shafted even though they had
been part of the principal parent company.
Now, let's go back to the Pension Guaranty Fund issue.
There was a report, the Towers Watson report. When was that
issued? Was that issued before they made their decision or
after they made their decision?
Mr. Gump. Before they made their decision, and only just a
couple of weeks before, okay? So it was a very ----
Mr. Mica. And is that the report that also said it was 86
percent funded?
Mr. Gump. That is correct.
Mr. Mica. And I think historically, many plans that were
terminated performed far worse than that. In fact, that was a
pretty high funding and performance level?
Mr. Gump. It was better than the average of the top 100
largest plans in America at the time. That average was about 84
percent. So the Delphi plan was actually well funded. And
remember, we were at the very trough, the very bottom of a
major recession. So almost every plan in America was
underfunded at the time.
Mr. Mica. So everyone believes, then, it was just an
arbitrary decision that was either--we don't know, but forced
on the Pension Guaranty Fund in this matter.
Mr. Rose. The average funding level of the top 100 plans
was 84 percent, as Bruce suggested, and none of those top 100
plans were terminated, yet ours was terminated at 86 percent.
Mr. Mica. So, basically a political decision, and just
excluding a class which happened to be the salaried workers.
Mr. Gump. Chairman Mica, one of the concerns we have and
the reason that we need the Census information is to understand
how it is that PBGC determined that our plan was only 46
percent funded. Somehow they modified the liabilities of the
plan to make it appear as though it was much worse funded than
it really was.
Mr. Mica. Well, I was also appalled by the record of
failure to respond both to our committee, to the courts, and
the courts had some pretty specific directives--I think you
cited those--in which they still haven't complied, not just our
committee. Mr. Turner had confirmed that Ways and Means had
also, because they oversee Treasury, had been denied the
information.
And the Freedom of Information requests, were those made by
your group again, the Delphi Salaried Retirees?
Mr. Rose. Yes.
Mr. Mica. Okay. And most of what you got, you said, was
redacted or not germane?
Mr. Rose. Yes, heavily redacted or simply not supplied.
Some emails were ``Dear So-and-So,'' blacked out completely,
``sincerely.''
[Laughter.]
Mr. Mica. Well, unfortunately, that seems to be what we
have run into. I am the most senior member of the panel. My
seniority is greater than even Mr. Issa. And so I have seen a
lot in my 21 years. I have never seen an era in which they have
denied at least the rightful committees of Congress
information. Our committee, as you know, we had to hold the
Attorney General in contempt, and we still don't have the
rightful information we are entitled to. We are now still in
court even after he was held in contempt to get that.
I talked to Mr. Turner last night and staff, and we are
going to go back, I will go back and have discussions with Mr.
Issa. If necessary, we will see if the subcommittee can issue
subpoenas for the information.
The other thing, too, is we have held so far Mr. Holder in
contempt. It may be necessary to go after additional folks in
different agencies. We have TARP. We have the Auto Task Force,
the Pension Guaranty Fund, Treasury, maybe even the United Auto
Workers. Does anyone know if any of the other union groups were
in communication on a resolution of their part of the pension
settlement?
Mr. Gump. UAW was, in fact, part of the discussions that
happened in Poughkeepsie, New York during the auto bailout. The
negotiations that happened ----
Mr. Mica. You were not invited to Poughkeepsie.
Mr. Gump. We were not invited.
Mr. Mica. Who else was in Poughkeepsie? There were two
other smaller unions?
Mr. Gump. Treasury, PBGC, General Motors, Delphi, and UAW
are all that I am aware of. The IUE and the Steelworkers had
separate negotiations that resulted in the top-ups. It should
be clear, by the way, I noted in ----
Mr. Mica. They were separate from Poughkeepsie?
Mr. Gump. Yes, separate from the Poughkeepsie meeting.
But I want to make clear, too, that the new General Motors
was under no obligation to those old contracts. They were held
by the bankruptcy court to not be liable to those old
contracts. Those old contracts still do exist, but they are
with old GM, not new GM. And yet it is new GM that is topping
up the pensions. Supposedly, new GM chose to pay a billion
dollars to top-up the pensions for the IUE and the
Steelworkers. So those negotiations happened separately, not as
a part of the bankruptcy process, and certainly not as a result
of contracts.
Mr. Mica. It is estimated it is going to take--well, they
are going to spend about $20 billion--that will be at a loss to
the government to correct the pension situation. How much
additional would it cost to cover the salaried employees?
Mr. Gump. Nothing. It will cost the government nothing. The
money ----
Mr. Mica. You base that on the money that has been paid
into the fund.
Mr. Gump. That is correct. There was a waterfall fund. What
happened was that in order to get the agreement of the PBGC to
abandon the only tool that ERISA really allows them, and that
is to file liens and claims against the assets of the company,
they abandoned those in exchange for stock in new Delphi. Now,
the company didn't even exist when they made that deal, but
over time it did actually work out, and Delphi was able to
purchase back that stock for about three times the original
value. So that was the waterfall fund.
However, those liens and claims were sort of like the key
to the car. You might buy a car for $20, but you can't drive it
without the key. So what is the value of the key? That was what
the liens and claims were. Delphi's foreign assets that the
claims were against were worth between $3 billion and $4
billion at the time, and they couldn't dispose of them until
those liens and claims were disposed of.
So Treasury was in a hurry. There was no time to get this
done in any other way, so they simply terminated the plan and
got PBGC to accept stock in a nonexistent company at the moment
in order to get them to agree to abandon their claims.
Mr. Mica. How much have you had to spend so far, Mr. Rose,
in illegal pursuit?
Mr. Rose. Delphi salaried retirees, after paying increased
health care costs from reduced pension dollars, have
contributed $3.8 million to our counsel, who has done an
excellent job for us. In addition, the government has spent $2
million defending the lawsuit of our own taxpayer money. All of
this for something that didn't need to happen.
Mr. Gump. Just to clarify, if you don't mind, that $2
million is how much they paid an outside law firm. Their own
internal expenses, we don't know what they are.
Mr. Mica. On top of that.
Mr. Gump. Yes.
Mr. Mica. Well, again, this is very frustrating. I can
imagine your frustration, being ignored. Sometimes in Congress
we do have a change in various leadership committees and
panels, but I have taken this on and will pursue it, and I
think we will look at any avenue we can to work with your group
and try to, again, ascertain the facts.
It is just deplorable that these agencies of government
would be so non-responsive both to Congress and the courts.
Again, this is a huge amount of taxpayer money. I think maybe
Ms. Miller testified that everybody is boasting about the
success of the bailout, and everyone has forgotten the 20,000-
plus salaried retirees that got left behind in this whole
process and now are ignored even in simple discovery of the
facts.
So we will crank it up and pursue it. Are there any other
suggestions as to how we might--I have likely suspects--how we
might get ----
[Laughter.]
Mr. Mica.--information from others, any other entities or
agencies or individuals that might be good to haul before us?
Mr. Gump. Certainly, Mr. Chairman, and we would be happy to
work with you outside of this to identify those people.
Mr. Mica. Okay. Well, again, thank you for your testimony.
Let me yield now to Mr. Turner.
Mr. Turner. Mr. Chairman, thank you so much. Thank you for
your dedication to the details of this issue and for your
understanding about the personal impacts and the fact that our
government shouldn't work this way, that this is an injustice
that no one should have to withstand.
Mr. Rose, you indicated that the government had spent $2
million on outside counsel in defending the lawsuit. I want to
correct that a little bit. They have been spending $2 million
on outside counsel to stop you from getting documents for you
to go forward with the agreement.
[Laughter.]
Mr. Turner. No one has been defending a lawsuit because the
lawsuit is not moving because they won't even come forward.
You mentioned the redacted emails.
With your approval, Mr. Chairman, I would like to enter
into the record these examples that I have. The first one says,
``Here is Skadden's latest draft of the agreement,'' and then
it says six lines removed, deleted. So we don't get anything on
the agreement.
The next one, draft PBGC settlement agreement, seven lines
removed, regards, Alison. This is one that has no text of the
email.
The next one, 20 pages of the email are deleted.
The next one, government attachment, deleted.
This one, I like this one because it says, ``Ron, a few
items from our phone conversation this morning about the
proposed Delphi PBGC settlement agreement.'' And then it says
10 lines removed. Then it says, ``Please call me if you have
any questions, John.''
[Laughter.]
Mr. Turner. We have a few questions and we will be calling,
John.
[Laughter.]
Mr. Turner. And the next one, deleted, 34 pages. After
this, the next one, deleted 17 pages. The next one, deleted
four pages. All of these show that there is no substance to
these emails.
Mr. Mica. Will the gentleman yield?
Mr. Turner. Yes.
Mr. Mica. So some of these individuals might have
information. Have any of them been hauled before our committee?
Mr. Turner. A few of them have come before when they
refused to testify before SIGTARP, the independent review for
the expenditures of TARP. We held a hearing solely on the
question of why aren't you answering the questions. We were not
able to go farther into the substance of what their answers
would be.
Mr. Mica. Well, I would like to sort through them. The ones
who haven't had the privilege or opportunity, maybe we can haul
them in. Thank you. I yield back.
[Laughter.]
Mr. Turner. Thank you, Mr. Chairman.
Mr. Mica. Without objection, these will be made part of the
record.
Mr. Turner. Thank you so much.
Mr. Chairman, as you described with respect to this
process, when Delphi and General Motors went into bankruptcy,
under the umbrella of TARP we had banks, we had bondholders, we
had the PBGC, we had General Motors, we had unions and general
creditors. What usually happens in a bankruptcy is that each of
those parties are independent. They are brought before the
court, and the court expects that each of them are going to
have the rights of the people that they represent.
But in this instance, because TARP was put in place, the
government had become the banks. The government had become the
bondholders. The government was PBGC. The government acquired
General Motors due to political connections. There was a close
relationship between the Administration and the unions, and
other creditors were pushed aside, and certainly the Delphi
salaried retirees were pushed aside.
Mr. Rose, I would like to ask you a question about that.
Federal law established that the PBGC is supposed to be an
independent agency. But when it came to the General Motors
bailout, the PBGC really stopped being an independent agency,
and I believe you have some comments and would bolster that.
But also, Vince Snowbarger, who came before us, talked
initially about that all of these parties were acting
independently. None of us believe that. He is now retired, and
I believe he has appeared in your litigation. Is there any
additional information we have about that so-called
independence between all those parties that basically became
Timothy Geithner?
Mr. Rose. Well, contrary to Mr. Snowbarger's testimony
before the prior hearing here in Dayton, since then he has
retired and has been deposed by our attorneys, and it was
stated there was no conflict in the PBGCs role, and actually I
think we found out just the opposite. Certainly Tim Geithner,
for example, had a triple role in this entire termination. It
is obviously Treasury, the Secretary of the Treasury, chief
lender to GM, certainly the head of the Auto Task Force that
was driving this, and he is also on the PBGC board. So there
was a tremendous conflict of interest.
Mr. Turner. Mr. Rose, part of the reason why everyone is
upset about this is because this should be a relatively easy
review process. We are dealing with issues of math and law.
What does the math say, and what laws apply. Unfortunately, the
answers that we frequently get throughout this process are
subjective, what people think the numbers are or what they
think should have been done, not issues of what is the math and
what is the law.
Our effort is, of course, to get the information and data,
apply math and apply the law and determine what occurred and
whether or not your rights were violated, as I believe they
were, and where the monies were and how they should be put
back.
You mentioned delays in final benefit determination. What
does that mean for you, and in a practical sense does it mean
that you have to continue to receive your pension under its
current reduction? As you go to 2015, we are still dealing with
math and law, but they are not even giving you answers for the
future, right?
Mr. Rose. That is correct. What they have given us right
now is a preliminary pension, okay? Well, it is very
preliminary, and they have to say they have to do the
calculations to perform a final determination. We are all
living with financial hardships. In many cases, salaried
retirees are living below Federal poverty level guidelines. And
now, it will be until after 2015, six years after termination,
that we are forced to live under continued financial
uncertainty.
Mr. Turner. So one of the issues really at the bottom of
it, it is not just that they won't tell us the math and the law
for how they decided to terminate the pension, take over the
pension and give you the numbers of your reduction, they still
aren't even telling you the math and the law for what the
future is.
Mr. Rose. That is correct.
Mr. Turner. And that is obviously part of what we need to
do, and I know that your lawyers are pursuing.
Ms. Miller, you talked passionately about the difficult
struggles that retirees have had. Could you tell us a little
about your own story?
Ms. Miller. Well, I think the biggest thing for me has been
the loss of health care. When I retired from Delphi, I expected
at that time to pay about $200 a month for myself and my
children that are still in school, in college. And now, to
cover myself and my boys, it is $2,300 a month. I can't do that
on my reduced pension. I mean, it is impossible. And to not
have health care after all these years of being able to provide
that for my family really makes me feel that I have let them
down and gives me great worry about what might happen to them.
So that is with me every day.
Mr. Turner. Mr. Gump, the chairman was saying that when we
had these emails that were released to the committee but were
redacted, so they are worthless on their face, the committee
had called forward these individuals when they had refused to
answer questions to SIGTARP, the special Inspector General, and
our focus then was to get them to comply with the answers. But
they still haven't answered you.
So what tools do you think are needed to ensure that the
Administration responds completely and effectively? Does the
law need to be changed, or is it just that the law needs to be
enforced?
Mr. Gump. I think the law needs to be enforced. The laws
are in place to prevent this and to have the ability to know
what happened and why. The issue here is that these people
acted behind closed doors in a very rapid manner and they cut
some corners, and they knew that they did it. They even have
some conversations about that. But they don't want us to know
that they knew that they were doing it because that would call
into question how they acted at all.
PBGC tried to follow a very rapid termination plan and a
plan that wasn't necessary to be terminated at all. So they had
to manipulate the numbers. They won't let us know how they did
that. They have had to follow a certain process, an involuntary
termination process that required them to meet certain criteria
that were not met. So they had to manipulate the plan to make
it appear as though it met that criteria.
So there are a number of pieces here that should be
available to us, and the tools to get to them do exist. We
simply need to enforce those rules. Issuing a subpoena to force
them to give up the information would be one that we would be
very grateful for. We have tried to issue our own subpoena, and
Treasury simply moved to quash it. So assistance to gain access
to those records, which do exist, would be very helpful.
Mr. Turner. Mr. Chairman, when we called the members of the
Auto Task Force forward to the Government Reform Subcommittee
to ask them why they were not answering SIGTARP, the
independent general counsel, they said, well, we are not in the
government anymore, we shouldn't have to answer any questions
about what we did when we were in government. Well, that is not
how our government works, and I appreciate your commitment to
that.
And with that, I yield back.
Mr. Mica. Well, thank you.
Again, I want to just ask one question on the amount of
money that is estimated to make this whole. Is there an
estimate, Ms. Miller?
Ms. Miller. I am going to defer.
Mr. Mica. You mentioned the Pension Guaranty Fund that
these folks had paid into, and with 20,000 folks, most of them
20 years or more paying into it before it was terminated, that
would have been a sizable contribution.
Mr. Gump. Certainly, there are estimates of that. The AFTAP
analysis that was done prior gives us some background. We need
to have Census information in order to have it fully accurate.
But I want you to consider the fact that PBGC has agreed that
the assets of the plan at the time of termination were about
$2.3 billion, and based on their own published return-on-
investment numbers, those assets should be something over $4
billion now. So there is more than enough money in the plan
already to fully fund it, especially when you add into it the
income from the waterfall and other sources that were there.
Mr. Mica. Well, again, I think Mr. Turner pointed out that
all these actions were government agencies, and I am stunned to
find out that you were totally excluded--that is my
understanding--from any of the negotiations in Poughkeepsie
with the Auto Task Force, TARP, Treasury. You never had an
opportunity to participate, while some of the others did, in
fact, and also did benefit. And now the fact that we are
finding it almost impossible through Congress or congressional
efforts to date, and the courts to date, to obtain information
on how all this came down.
As I said, we will see about our ability to issue subpoenas
and consult with Mr. Issa when we return, and then I think I
would like to also call in some of these folks from some of the
information that you have gotten that has been redacted and
that I have seen here submitted and see if we can't get them to
tell us the rest of the story. We will haul in those who have
not been hauled in and go back to the agencies.
Sometimes in Washington, I have found that you can be very
powerful and you can be very well placed, you can be very
financially well off, but you just have to be a persistent
bastard to get things done.
[Laughter.]
Mr. Turner. I don't know if I should be offended or not.
[Applause.]
Mr. Mica. Well, the worst combination for the offenders in
this case is they have two very persistent bastards.
[Applause.]
Mr. Mica. Well, we made a little light here at the end, but
this is a very serious matter, and it boils down to the basic
fairness of government and how it treats people, and also the
use of taxpayer money. I did not vote for TARP. I did not vote
for the bailout. I come from a business background. I just have
not followed that course. I did arrange for, as chairman of
Aviation, to assist the airlines with a loan guarantee fund, of
which every penny was paid back, and we made about a third of a
billion dollars after 9/11, and actually consulted because
there were several TARP proposals that were absolutely
horrible, but I couldn't support it in the end.
Nonetheless, this has transpired, and people's lives have
been dramatically unfairly impacted, and the government was
responsible for all of this, using government funds and
government agencies to make the decisions that have led to this
unfairness.
So I think what we will do is thank you for testifying,
coming before the committee, keeping this open and pursuing it,
which your association has done on behalf of the salaried
employees.
We will excuse you at this time. We may in the next seven
days have additional questions we will submit to you, and they
will be made part of the record. So thank you again for your
participation.
I am going to call up the second panel, and we will excuse,
again, Mr. Gump, Ms. Miller, and Mr. Rose. We will ask staff to
go ahead.
I am not going to recess. I want to go ahead and pursue the
witnesses. So we will ask them to come up. If people have to
excuse themselves briefly, do that.
We have two additional witnesses, and let me introduce them
as they come up and take their seats. One is Mr. Paul Dobosz,
as a member of the Delphi Salaried Retirees Association. The
second witness is Mr. James Sherk, and he is a senior policy
analyst in labor economics at the Heritage Foundation.
As I mentioned before to our previous witnesses, this is a
chief investigative panel in the Congress, our committee and
the subcommittee. We will swear you in in just a minute. I also
advise you that we would like you to keep your remarks to
approximately five minutes, and through request of the chair,
glad to submit additional information or data, any requests you
have through the chair into the official record.
So with that, we do have Mr. Dobosz and Mr. Sherk. Welcome.
I will ask you, pursuant to committee rules, to stand and be
sworn in. Raise your right hand.
[Witnesses sworn.]
Mr. Mica. The record will reflect that the witnesses
answered in the affirmative.
I welcome you again, pleased to have you with us this
morning.
We will recognize Mr. Dobosz first. I hope I pronounced it
right. Close?
Mr. Dobosz. Not quite, but it will do.
Mr. Mica. Okay. Tell me.
Mr. Dobosz. It is actually a Polish name. It is pronounced
Dobosz.
Mr. Mica. Dobosz, okay.
Mr. Dobosz. But no one gets it right, so I don't worry
about it.
[Laughter.]
Mr. Dobosz. When I was in college, I would hear people say
my name, I would just sort of snake my hand up and say ``Here''
the first time they called the roll.
Mr. Mica. Well, I am married to a half-Polish, maiden name
Szymonik, S-z-y. You have the S-Z on the end.
Mr. Dobosz, you are recognized, and welcome.
STATEMENT OF PAUL DOBOSZ
Mr. Dobosz. Okay. Chairman Mica, Congressman Turner, thank
you for the opportunity to address you on a matter that has
profoundly altered the lives and financial futures of over
20,000 Delphi salaried employees/retirees and their families.
I am a retired Delphi engineer who served those companies
loyally for 37 years. The last nine of those years of
employment were with Delphi. Like my colleague Bruce Gump, I
have received Delphi's highest engineering honors for numerous
patents and other intellectual property contributions that
helped make Delphi a technology leader and enabled the company
to win nearly half a billion dollars in new business.
At the time I retired in December of 2008, my wife and I
had carefully planned for financial self-sufficiency with a
retirement plan built around a three-legged stool of personal
savings, my Delphi pension, and then someday, Social Security
benefits. I never imagined that just seven months later I would
see that stool kicked out from under me by Federal government
institutions charged with defending and preserving pension
plans such as mine.
As I sat in the courtroom of Federal Judge Arthur Tarnow, I
could scarcely believe my ears as I heard the PBGCs attorney
tell the judge it was the obligation of the PBGC to protect the
PBGC and its assets. When Judge Tarnow asked him who was
looking out after the interests of the pensioners, the attorney
was speechless.
In the short time that I have to address you this morning,
I would like to share how unnecessary the termination of our
already frozen pension plan was, especially in light of
actuarial data the PBGC had in hand concerning the assets and
liabilities of our plan. The salaried pension plan had already
been frozen in October of 2008. That meant it was no longer
accruing any liabilities. The plan had also been closed to new
hires since January of 2001. Those new employees received a
defined contribution benefit in its place.
The PBGC was acutely aware that the economy was in a trough
and that the financial markets were in the beginning stages of
a recovery. The decreased valuation of the plan's assets
represented a snapshot in time rather than a realistic
determination of their ability to pay benefits and their long-
term viability. At the time of the termination, the Dow was
hovering around 9,000. But four years later, the Dow is now at
15,000, an increase of 67 percent. A market recovery of that
proportion has grown the value of the plan's assets. But
unfortunately for retirees, that makes no difference because
the PBGCs valuation of those assets, for the purpose of benefit
computations, is frozen in time at July 2009 numbers.
Well, that raises an obvious question. If the Delphi
salaried plan's assets were merely experiencing the effects of
a dip in the financial markets, why was the PBGC so agreeable
to terminating a plan to its own potential financial detriment?
The answer to that question lies in political influence.
Delphi's hedge fund debtor-in-possession lenders and other
politically influential players in the GM bailout were able to
exert that force on the PBGC via the U.S. Treasury and the Auto
Task Force to clear all pension liabilities from Delphi's
balance sheet.
With the knowledge we have gained from discovery, we now
know that despite the public insistence that the Delphi
salaried plans were severely underfunded, the PBGCs own
internal analysis of potential scenarios to preserve the Delphi
salaried plan show that very modest additional funding would
have been required to fully meet the plan's obligations.
Actuarial reports in the PBGCs possession showed the real
asset-to-liability ratio at 75 percent or, as previously
mentioned, 86 percent, utilizing even some pessimistic economic
assumptions.
Meanwhile, the PBGC continued to justify that termination
by citing asset-to-liability ratios of around 46 percent.
Independent actuaries who benchmarked the Delphi salaried plan
against peer plans that they had deemed adequately funded
judged that the Delphi salaried plan funding was at least on a
par with those plans.
All of that uncertainty and conflicting numbers continues
to hang over the heads of retirees who, four years after plan
termination, are still waiting for accurate accounting of
assets and liabilities seized by the PBGC and, most
importantly, their final PBGC benefit amount. In response to an
inquiry by Congressman Turner, the PBGC recently stated that
they are unlikely to have this task completed anytime soon, in
fact, before 2015. Now, that is six years after the termination
took place. In my mind, there is no credible excuse for taking
six years to account for assets and liabilities and compute
benefit amounts according to a set formula.
I could dive deeper into what we have learned in this
arduous four-year battle to recover our pensions that were
seized to benefit the politically powerful, but time severely
limits how much I can share in this forum. Delphi salaried
retirees aren't asking for a handout. We are asking for our
government to behave in an open and honest manner and to comply
with laws and regulations without regard to political influence
or power. This issue may not garner very widespread attention
and front-page headlines, like the IRS scandals currently are,
but it represents an equally blatant abuse of political power.
Thank you for the opportunity to testify before the
committee.
[Prepared statement of Mr. Dobosz follows:]
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Mr. Mica. Well, thank you.
Now we will turn to Mr. Sherk. He is affiliated with the
Heritage Foundation but appears to be testifying on his own
behalf today as a result of his review of this matter.
Welcome, sir, and you are recognized.
STATEMENT OF JAMES SHERK
Mr. Sherk. Chairman Mica and Congressman Turner, thank you
for inviting me to testify. My name is James Sherk, and I am a
senior policy analyst in labor economics at the Heritage
Foundation. But as you said, the views I express in this
testimony are my own. It should not be construed as an official
position of the Heritage Foundation.
This morning I want to explain that the United Auto Workers
received unusual preferential treatment during the auto bailout
and that without this favoritism, the taxpayers would not have
lost money. There are several important facts about the bailout
for you to consider.
The first fact is that the United Auto Workers received
highly unusual preferential treatment. Bankruptcy law gives the
courts the authority to rewrite union contracts to make
companies viable again. In a normal bankruptcy, union pay at
General Motors and Chrysler would have been reduced to market
rates. Instead, while the union did make significant sacrifices
on behalf of new hires, incumbent workers retained most of
their existing compensation packages.
As the UAW put it, ``For our active members, these
tentative changes mean no loss in your base hourly pay, no
reduction in your healthcare, and no reduction in pensions.''
This rarely happens at unionized companies in bankruptcies.
Bankruptcy law also provides for secured creditors to
recover their claims before unsecured creditors, and for
similarly situated unsecured creditors to receive similar
treatment. This also did not happen.
General Motors owed approximately $20 billion to a trust
fund paying UAW retiree health benefits and $30 billion to its
unsecured bondholders. These claims had the same legal
priority. However, the union enjoyed a substantially greater
recovery on its debts. For their $30 billion in claims, General
Motors' unsecured bondholders received stocks and warrants
worth, in present value, $8.7 billion. Had the UAW received
equal treatment, it would have recovered the same proportion of
its debts, about $5.9 billion. Instead, the union collected
assets worth $20.4 billion, over three times as much.
The same thing happened to Chrysler. Chrysler's first lien
secured creditors collected $2 billion on their $6.9 billion in
debt, 29 cents on the dollar. Chrysler's second lien secured
creditors collected nothing. Legally, the UAWs claims had lower
priority than both the first and the second lien secured
creditors, so the union should have also received nothing until
all the secured creditors were paid in full. Instead, the union
got securities and ownership shares in new Chrysler worth, in
today's dollars, present value, $9.7 billion. And as we have
discussed today, UAW members also received special treatment at
Delphi when it filed to have the PBGC take over its pension
plans.
Half of the Delphi retirees, both salaried and hourly,
faced reductions in their pensions. Now, old GM had an
agreement with the unions to top-up the pensions in case Delphi
went bankrupt, but that was only a liability for old GM. New GM
had no such liability. Instead, nonetheless, new GMs
management, while being overseen by the Obama Administration,
supplemented the pensions of the unionized retirees at a cost
of $1 billion. The non-union retirees, again, recovered
nothing.
The United Auto Workers received highly and unusual
favorable treatment during the bailout and the bankruptcy.
The second fact about the bailout to be aware of is that
the automakers could have been kept in business without any of
this favoritism. They could have produced the same number of
cars and made as much money at much less cost to taxpayers.
There was no business reason to provide this favoritism. The
Obama Administration's justification is that the United Auto
Workers were essential to basically prevent them from striking.
But in 2009, they had little leverage and had no plans
whatsoever to go on strike. Even if the union had gone on
strike, General Motors and Chrysler have had no difficulty
filling their new Tier 2 positions that pay less than what the
transplant automakers pay. The companies could have simply
continued operations with replacement workers. There was no
reason for this preferential treatment.
Had the government treated the UAW in the manner required
by bankruptcy law, the entire bailout would have amounted to
subsidized loans instead of the bailout that they got. The UAWs
excess recovery did nothing to keep the automakers in business.
The third fact is that this union favoritism caused the
taxpayer losses on the bailout. The Congressional Budget Office
and the Treasury Department estimate that taxpayers will lose
between $17 billion and $20 billion on the bailout. These
losses would not have occurred if the Administration had given
the UAW standard treatment in the bankruptcy. If the bankruptcy
had reduced union compensation to market rates, GMs labor costs
would have fallen, raising the value of the government's
ownership in new GM. This would have saved taxpayers almost $5
billion.
The union trust fund's disproportionate recovery also came
at taxpayer expense. The excess shares in securities that the
union got could have gone to the Treasury and to the taxpayers
instead. Not doing so cost taxpayers $14.5 billion at General
Motors and almost $10 billion at Chrysler. And not giving the
bailout to the hourly retirees at Delphi would have further
reduced the cost of the bailout by $1 billion.
In total, the UAW received $30 billion more than it would
have under normal bankruptcy proceeding. The entire loss to the
taxpayers comes from these funds diverted to the union. The
Administration could have kept the automakers running without
losing a dime.
Thank you. I appreciate the opportunity to explain how the
unusual treatment given to the UAW caused the taxpayers to lose
billions on the bailout of General Motors and Chrysler.
[Prepared statement of Mr. Sherk follows:]
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Mr. Mica. Thank you both for your testimony, and I will
turn to some questions now.
Mr. Sherk, let me ask you a question. The Pension Guaranty
Fund was terminated for the salaried employees. Do you know if
it was terminated for the hourly or kept in place?
Mr. Sherk. My understanding is it was terminated for both,
but then the hourly employees received a top-up from new GM.
Mr. Mica. So, in other words, the top-up would have had to
come from taxpayer money because they were operating basically
on the lifeline that was thrown to them by the Federal
Government at the time.
Mr. Sherk. That is exactly right. New GM was a creation of
the taxpayers. It was capitalized and created by the Treasury,
and all the initial operating funds they had came from taxpayer
funds.
Mr. Mica. Now, when we get through with this, I have seen
that some stock has recently been stole--sold.
[Laughter.]
Mr. Mica. A slip of the tongue there. Some of the stock has
been cashed in at about $34, $35. It would have to be in the
$50 range, I think, to break even?
Mr. Sherk. That is right. If it had been sold at $50 right
from the get-go ----
Mr. Mica. But the total amount that the taxpayers are going
to end up paying, are you familiar with it? I heard the
estimate is $17 to $20?
Mr. Sherk. Yes, it depends on the--the taxpayers still have
about 200 million shares of new GM, and it depends what price
those ----
Mr. Mica. What price the balance is sold?
Mr. Sherk. Yes. So it is ----
Mr. Mica. A potential $15 billion to $20 billion?
Mr. Sherk. That is right.
Mr. Mica. The other thing, too, is it looked like the
topping up of the unionized retirees' pensions was about $1
billion, but the UAW got $30 billion in perks from the bailout.
Can you explain how you calculate that?
Mr. Sherk. That is right. There were three different
assessing preferences they received. The first was for the
union retiree medical benefits trust fund, also called AVIBA.
Which had about $20 billion was owed to them at General Motors
and ----
Mr. Mica. At the time of the bankruptcy.
Mr. Sherk. At the time of the bankruptcy, and about $8
billion, and this was basically future claims brought into
present value terms in 2009. And they should have recovered at
the same rate as the unsecured creditors of both companies.
Now, at General Motors, they were covered at about triple
the rate of the unsecured creditors, and at Chrysler the
secured creditors weren't even paid off. They got 29 cents on
the dollar, the first claim secured creditors. So the union
should have also got nothing, and all those excess shares that
the unions recovered could have gone to the taxpayers instead.
Mr. Mica. So you have the salaried employees, the secured--
were they bondholders?
Mr. Sherk. At General Motors, the secured creditors were
made whole, but the unsecured creditors collected at a much
lower rate than the unsecured.
Mr. Mica. Okay.
Mr. Sherk. At Chrysler, the secured creditors got 29 cents
on the dollar. The unsecured creditors got nothing.
Mr. Mica. And you said that is a huge liability on the
healthcare side. Was that GM and Chrysler?
Mr. Sherk. It was for both of them. It was $14.5 billion at
General Motors, the excess recovery. It was about $20 billion
that was owed at General Motors, and about $8 billion was owed
at Chrysler. And then the unions got shares and stocks in the
company that became worth quite a lot of money.
Mr. Mica. The breakdown of the $30 billion is mostly
healthcare?
Mr. Sherk. It is mostly healthcare with about $10 billion
at Chrysler, $14.5 billion at GM for those healthcare costs.
Mr. Mica. How did the retirees find their healthcare
situations, or were you completely taken out of the healthcare?
Mr. Dobosz. Yes. We received a notice in February of 2009
that as of April 1st we would no longer have company-provided
healthcare. At that point, we could buy it individually. In my
case, for my wife and myself, it was $1,600 a month. This was
before the pension termination took place. We realized that
this was a very non-viable situation, and so we organized a
voluntary benefits association, AVIBA, that was HCTC qualified,
and now our retirees have access to that through the end of
this calendar year until the new health care law takes effect,
and that provides premium subsidies. It brings the premiums
down for a family to maybe $500 to $600. I am not familiar with
the current numbers on that but somewhere in that range, as
opposed to $1,600.
Mr. Mica. Well, okay. You saw your pensions cut, your
healthcare eliminated. On the other side, the hourly ----
Mr. Dobosz. Their healthcare is assured, and their pensions
are whole. It is a totally different treatment.
Mr. Mica. So they used taxpayer money also to underwrite
that.
Mr. Dobosz. That is correct.
Mr. Mica. The losses were staggering, or the indebtedness
of the healthcare, a huge portion of that. Now, what happened
with that? That was just written off also?
Mr. Dobosz. The healthcare portion?
Mr. Mica. Yes, again for the new GM. Did they come out of
this with no healthcare liability?
Mr. Dobosz. Yes. The unions actually became the healthcare
providers for the retirees, and it was funded with this money
that they received from the bailout.
Mr. Mica. So the Pension Guaranty Fund, which was supposed
to help you, did not help you. It had about $2.3 billion in
assets at the time they threw you overboard, and you had this
huge liability on healthcare, which was also absorbed by the
taxpayer. So you got doubly shafted. Even if you got your
retirement back, you are still shafted on the healthcare side.
Mr. Dobosz. Until our people are Medicare eligible, and we
had a group of fairly young retirees because our demographics
were such that as Delphi started closing a lot of operations,
people were being pushed to either retire early or they had no
other options.
Mr. Mica. Well, most of this effort has been to seek some
justice in the pension, but the healthcare is actually--you
have not been able to pursue. There is nothing to pursue there.
You just got shafted, and the taxpayer money which--ironically,
you were paying taxes all that time and ended up bailing out
the incredible amount of money for healthcare that was due.
Mr. Dobosz. Yes. And I do have to say, the health coverage
tax credit that we are eligible for has been a lifesaver for
many of our people because without it, they would be going
naked without any coverage.
Mr. Mica. Mr. Sherk, you heard some of the testimony by the
previous witnesses that, again, the Pension Guaranty Fund acted
arbitrarily, that in fact with 86 percent of the assets
available, they were still terminated. Do you see that as
correct? In their figures, is there enough there, if they were
treated fairly, and that still could be the case, to make whole
their retirement?
Mr. Sherk. I haven't had the opportunity to review those,
the 86 percent figure. If that is true, that they were 86
percent funded when they were terminated, then it is very hard
to see a justification for the termination, that there are a
lot of funds, especially in 2009, that were terminated--sorry,
that were not terminated.
Mr. Mica. That were not even in that good a shape.
Mr. Sherk. Yes.
Mr. Mica. Well, again, I think we need to get additional
data. I was impressed with your report. I will have to get this
posted online. I guess you are releasing it today, your
statement. You actually covered more than you did in your
testimony, some 16 pages of background information, and pretty
in-depth. So we appreciate you providing that to the committee
and your testimony.
Let me yield to Mr. Turner.
Mr. Turner. Mr. Chairman, thank you so much for your
statements on the issues of healthcare, because that is one
that also illustrates the inequity. If you look at the issue of
the health care tax credit that they currently have been
utilizing, it is expiring. With the Obamacare increases in
premiums that are expected, and the pension reductions that
each of these individuals have received, the financial impact
on them is even greater as they look to what they may be facing
in future costs for health insurance and healthcare.
I know how this impacts families directly. My father was
IUE from General Motors, not Delphi, in his retirement. But he
was not UAW as a result in the bankruptcy of General Motors. He
lost his healthcare after working for General Motors for over
40 years. Luckily, he was able to go onto my mother's
retirement health insurance. But without that, we would have
been facing a significant crisis, as many of these families are
facing. They did face, of course, increased costs, but they
would have had a crisis, as many of these families have
struggled with. I appreciate your highlighting that because
that is absolutely a taxpayer-funded difference.
Whenever you have an issue like this where the government
does something and it doesn't make sense and you try to do
oversight, and the government doesn't respond to requests for
documents and information, you become increasingly suspect. But
another area where you can become increasingly suspect is if
you call people forward and ask them questions and the answers
that they give you are disingenuous, where there are clearly
misrepresentations.
Mr. Chairman, we have had hearings where we have asked
people why was UAW topped up in the bankruptcy, and the answer
has been to us, well, there was a pre-existing agreement
between GM and the UAW for topping up the pensions. We all
know, as Mr. Sherk was saying, one that would have been under
the bankruptcy with old GM, and it was not binding in
bankruptcy. And if you ask the next question in the hearing,
yes, but this was a bankruptcy, wasn't that agreement voided,
the testifier will say, yes, it was voided. But their initial
answer to us, which is the disingenuous one, is where there was
an agreement for it to be done.
I would like each of you, if you could give us other
examples that come to mind of answers that we have received
that just don't make sense, because when they tell you one
thing and you actually know another, I think it leads you to
conclude that they are not telling the truth. I know the
frustrating process of lack of answers certainly gives us
suspicion. But the frustrating process of getting incorrect or
misleading answers is even more so, and I am certain that
perhaps each of you could contribute to our overall perception
of why this has been really a stonewalling from the
administration.
Mr. Dobosz. I guess my biggest frustration is when I ask a
question of the PBGC, or when we do, we wind up with an answer
that just creates another question. I am trying to think of an
example. There are so many of them. But in general, let me just
focus on something very recently.
We had something sprung on us about a month ago that, oh,
by the way, you are not going to get your full PBGC amount from
the PBGC. There was some sort of a private annuity with three
insurance companies. Therefore, a portion of your pension is
going to be paid by them, and we will pay the difference
between what we used to pay you and that amount.
So I asked them the question, I said why, then,--first of
all, I asked them the question, is this a guaranteed benefit
coming from the private annuity? And they said, no, that is
totally outside of the pension. So my next logical question
was, if it is not an insured benefit, why is it included in the
cap that you capped my benefits at?
I have sent three follow-up emails to the PBGC asking them
for details on how this was calculated, more details about this
annuity and why it should be maintained as a part of the cap,
and I keep getting the response, we will give you an answer in
three days, we will give you an answer in three days. We are so
sorry, we will give you an answer in three days.
So it is just a constant delaying cycle, and you can't get
a straight answer. You don't have any idea what is going on,
and you really don't have any idea what you are going to wind
up with long term, so you can't even plan for the worst,
because there is a possibility right now, if the PBGC decides
they are paying any of these people too much, that they will
start clawing it back.
Mr. Sherk. The answer to me that sounds the most
disingenuous, when they are asked why did you give these
preferences to the unions, why did they collect so much for the
rebo, why didn't they make more concessions, it is always a
business necessity. We needed to maintain the business
relationship with the union and basically keep them happy to
ensure productive future operations.
That is ludicrous. That is beyond ludicrous. The union was
not going to go on strike in the fall of 2008 and early 2009.
They knew the alternative to the bailout was the liquidation of
the company and all of their members losing their jobs. They
had absolutely no leverage to insist that they get $30 billion
in taxpayer money redistributed to them. There was no business
necessity to do that. And even if the union had gone on strike,
the companies have had no difficulty filling these Tier 2
positions that pay far less than what the incumbent workers
were enjoying. They could have continued operations with
replacement workers.
There was simply no necessity to give the union $30 billion
in order to keep the companies running. And yet, every time
they are asked why did you do this, that is the response,
business necessity, we had to ensure smooth operations.
That dog just won't hunt. It is not remotely plausible.
Mr. Turner. Well, thank you both for addressing that. As we
have said through these hearings, that has been one of the
aspects that has been most troubling, that if you don't ask the
second question, they will leave you with a misleading answer.
Mr. Chairman, as I go to yield back, I want to thank you
once again for taking your time to be here. You are a man of
action and have a great reputation in Congress of being highly
substantive. The fact that you have come to Dayton, Ohio to
hear this story today I know is time that you are taking both
from your work in Congress, your district, and your family. As
you know, we are hoping that the message today would be one
that would be a call of action. The power of your gavel is
significant, and we appreciate that you brought it here today,
and I look forward to any way that I can assist you in what you
see might need to come out of this.
This is one of those items where, if no one holds the
administration accountable, no one will ever know what happened
or what should happen. And that is the difference in our job of
oversight, is looking at what happened and what should happen,
and that is how we get justice and resolution.
With that, Mr. Chairman, thank you for being here today.
Mr. Mica. Thank you, Mr. Turner, for your participation,
and also your persistence in bringing this matter before me and
our subcommittee and the full committee.
As I said, the manner in which we are going to proceed, I
see a dramatic failure of our success in obtaining even the
basic documents and information that I think Congress is
entitled to. So whatever steps I need to try to secure that
information, we will pursue that, be it subpoenas.
Additionally, we will convene another hearing, a full
subcommittee hearing in Washington. I want to go back through
the documents of some of these folks that you cited today and
see who has testified, who has not testified, who was involved
in making these decisions, and we will ask them to testify. It
will either be voluntary or involuntary. We may need subpoenas
there, so I will need your support in working with the
committee to demand the appearance of those witnesses and that
information.
This is the kind of issue that could easily get swept under
the rug or ignored. It affects 20,000 people, which is
significant. But Washington is miles away, and sometimes
attention gets diverted to other issues. But I believe this is
one that does require our response. Sometimes these issues do
take a while to pursue, but I think it should be pursued, and
you have my commitment, Mr. Turner, that we will keep this high
on the radar and action screen for the next months and weeks
ahead here so it won't be ignored.
It is a grave injustice that, again, taxpayers who were GM
employees, Delphi employees, and now retirees, would see their
government not only abandon them but take their resources and
unfairly distribute them and leave them behind. So if there is
a remedy, we will look for that. I can't guarantee it, but we
will certainly pursue the matter.
I want to thank both of the two witnesses on this panel and
the three witnesses that appeared before us today.
There being no further business before the Subcommittee on
Government Operations, this meeting and hearing is adjourned.
[Whereupon, at 11:44 a.m., the subcommittee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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